Stimulus check Chapter 13?

[anitag1]

I'm still having an issue with this, though...

So what's to keep everyone from running to their HR departments and changing their withholding so they get zero refund, thus not having to have this stimulus be taken from their tax refund?

It just seems too "easy". And maybe that was missed because it was rushed. I changed mine a while back so the trustee wouldn't get my future refund.

[shipo]

I don't understand what one has to do with the other.

[justbroke]

So what's to keep everyone from running to their HR departments and changing their withholding so they get zero refund, thus not having to have this stimulus be taken from their tax refund?

I don't understand this. The stimulus is both a refundable tax credit and a non-recoupable (is that even a word) tax credit. In other words, you are going to get this money. If they overpaid they cannot recoup. If they underpaid, they'll give you the remainder when you file your taxes for Tax year 2020 (in 2021).

I am surprised and thrilled with how carefully they worded what's in the bill to exclude this as "income" in bankruptcy by actually modifying the bankruptcy law at the same time.

So, this is different than a normal tax refund.

[sophieanne]

What I thought was interesting in the stimulus pkg is that 5 yr plans can be increased to 7 years..will be waiting to read/hear more. The written clause is not clear.

[justbroke]

What I thought was interesting in the stimulus pkg is that 5 yr plans can be increased to 7 years..will be waiting to read/hear more. The written clause is not clear.

That is interesting. Until they update the Cornell website, it's hard to gauge the legislative text. That's because, as you know, they are writing "edits" to the existing law, and until I see the edits actually in the written law, I don't want to do as they instruct. (After the "and" in Subsection II of paragraph A, add a semicolon and add the following text... isn't exactly something I want to do!)

[sophieanne]

justbroke

This is wording from the American Bankruptcy Institute:
Key bankruptcy provisions within Sect.1113 of the CARES Act include: (there are a few provisions listed)
this is the one that got my attention:
* Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due. *
The bankruptcy provisions of the CARES act listed above sunset within a year of the legislation being enacted.
(Sorry I couldn't copy/paste)
https://www.abi.org/newsroom/press-r...viding-greater

[justbroke]

sophieanne this is the wording from the law. So the ABA just changed some of the wording to make it easier to understand.

A plan modified under paragraph (1) may not provide for payments over a period that expires more than 7 years after the time that the first payment under the original confirmed plan was due.

(From the Final Final CARES Act as signed into law on Friday, March 27, 2020)

[sophieanne]

justbroke - I'm just glad to see the provision added. Thanks for posting. Where did you find the final Cares Act? I found lots yesterday, but not so much today.

[justbroke]

I found it at the NPR (National Public Radio) site at https://www.npr.org/2020/03/25/82075...us-relief-bill.

They have a link which takes you to the document for download, of you can read it right there on the website.
The download link is https://www.documentcloud.org/docume...CARES-ACT.html

[Carmella]

Forgive me, I am slow. Does this mean those of us in Chapter 13 will get a check? My husband and I based on our income are eligible. We get to keep the money, it's not counted as income/disposable income??

We already filed, it is based on 2019. That is good since our young adult daughter will get her own check for $1,200 which will help her move out of our house! I was concerned since we had a $500 credit for her on our 2018 taxes and didn't know if that would effect anything.

We owe taxes so probably will put the money into the taxes or at least a good portion of it. We keep paying some of utilities late I would love to take part of the money and catch up so we are paying on time and not getting late fees. Maybe I can figure out a way to handle that putting a good chunk on the taxes and making more payments on taxes throughout the year and having our regular bills up to date, especially the cell phone and cable/internet.

[mikejayc]

justbroke

This is wording from the American Bankruptcy Institute:
Key bankruptcy provisions within Sect.1113 of the CARES Act include: (there are a few provisions listed)
this is the one that got my attention:
* Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due. *
The bankruptcy provisions of the CARES act listed above sunset within a year of the legislation being enacted.
(Sorry I couldn't copy/paste)
https://www.abi.org/newsroom/press-r...viding-greater

So this says that if you're in Chapter 13 that you can seek payment plan modifications and extend payments for up to seven years if you have a material hardship. I've also found the section that says that the stimulus won't be counted as income for people that are going to file bankruptcy in the future - but I can't find anything that specifically and plainly states that Individuals currently in Chapter 13 who qualify will receive and get to keep the stimulus and that trustees cannot take any portion of it. It may be implied but is there anything that clearly states that in black and white?

[justbroke]

Forgive me, I am slow. Does this mean those of us in Chapter 13 will get a check? My husband and I based on our income are eligible. We get to keep the money, it's not counted as income/disposable income??

According to the bill's text, you should still receive a check. Chapter 13 Trustees should not try to take the money, but there may be one or two that try. I think the law is clear that it's "not" income for purposes of bankruptcy or a Chapter 13.

We already filed, it is based on 2019. That is good since our young adult daughter will get her own check for $1,200 which will help her move out of our house! I was concerned since we had a $500 credit for her on our 2018 taxes and didn't know if that would effect anything.

I don't think there will be any issue so long as she filed, as an adult, on her 2019 taxes and has already filed those taxes. But that's just my guess. I do know that adult children that were claimed as a dependent, will not receive a check and the parent will not receive any credit for an adult dependent.

We owe taxes so probably will put the money into the taxes or at least a good portion of it. We keep paying some of utilities late I would love to take part of the money and catch up so we are paying on time and not getting late fees. Maybe I can figure out a way to handle that putting a good chunk on the taxes and making more payments on taxes throughout the year and having our regular bills up to date, especially the cell phone and cable/internet.

That certainly would be nice.

[sophieanne]

mikejayc - Hi....if you click on the links above....one under my name and one under justbroke's name..you can see the information. Justbroke has a link that takes you to the 800+ page document.

[mikejayc]

sophieanne

mikejayc - Hi....if you click on the links above....one under my name and one under justbroke's name..you can see the information. Justbroke has a link that takes you to the 800+ page document.

Right - where I get hung up is that it says:

Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.

Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.

Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic

While it states that it won't be treated as income - it seems specific to point out it won't be treated as income for the purposes of filing and/or confirming - and that if you're currently in one that you can request a modification if you're experiencing hardship.

I'm not a lawyer by any means and definitely not trying to freak anyone out - but having filed bankruptcy last year I've been pretty much trying to make sure that there's very little doubt in interpretation between what I'm expecting and what a trustee might try to say. So just by reading that they could go as far to say "Well it doesn't specifically state that if you're in Chapter 13 that you get to keep any or all of it - only that you can modify your plan and get an extension if you can prove hardship due to the pandemic." I'm hoping that trustees just won't bother playing that game.

[justbroke]

While it states that it won't be treated as income - it seems specific to point out it won't be treated as income for the purposes of filing and/or confirming - and that if you're currently in one that you can request a modification if you're experiencing hardship.

That is exactly what I stated many times above. Some enterprising Chapter 13 Trustee "could" try to say that it's only for confirming a Chapter 13 Plan. But clearly, Congress intended for this stimulus to not be income, for purposes of a Chapter 13 plan. We'll have to wait and see. I would think that the supermajority of Chapter 13 Trustees are not going to touch it, but some Chapter 13 Trustee may try to grab it from all the Chapter 13 debtors.